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Joe Palomba shares how Rheem aligned leadership, process and data to build a connected AI-ready enterprise. 

 

You can hear more from Joe Palomba at Rethink.

Jeff Puma: Well, hello there everyone. I’m Jeff Puma, content director for the Manufacturing Leadership Council and I’m excited to be here for this Executive Dialogue. Joining me today is Joe Palomba, the senior vice president information technologies for Rheem Manufacturing. Joe, thanks for being here. Thanks for making time for this.

Joe Palomba: Thanks, happy to be here.

Jeff: Excellent. We’re really looking forward to this conversation, but also to your case study at Rethink in June. That case study, of course, is Digitally Transforming into an AI-ready Enterprise at Rheem, and we’re excited to have you for that. We’re going to talk a little bit about things that come up to that presentation, I think. But we’re going to try not to step on that presentation. It’s a little bit of a teaser. We don’t want to take away your thunder for when you’re in person there. So if we could start, would you mind sharing a little bit about your career path and what led you to your current role at Rheem manufacturing?

Joe: Yeah, sure 100%. I’ve been at Rheem now for close to four years, but how I arrived at Rheem, I would say has been quite a journey. So if I go back maybe 10 to 15 years, I started my career really as an SAP consultant, as a business process consultant. I spent a lot of time in the manufacturing arena, in the distribution arena, doing SAP projects. And as my career progressed, I found myself in the independent consulting realm of the world.

I had built a small independent consulting company, but that brought me to a company in the HVAC space about 15 years ago and I spent a lot of time in the HVAC space. I met a lot of influential leaders in that space as well. And through those relationships kind of carved my path forward into Rheem. I was selected to be on Rheem’s digital transformation team essentially through all the work I’ve done in the HVAC industry, in the business process space and technology space.

Jeff: That’s a great transition to my next question actually, which is can you talk a little bit about the specific role at Rheem and, as senior vice president of information technology, how is your team driving digital transformation across the company’s footprint?

Joe: Yeah, when I started four years ago, I was really in the enterprise application space and at the time, we were doing a lot of foundational activities, Jeff. We were hardening our infrastructure and cyber capabilities. We were consolidating ERPs into a single ERP instance of our Oracle platform.

But as that started to move up the chain in terms of strategy and transformation, we embarked on a transformation strategy that really looked at our entire business as a single integrated process. In fact, we coined the project Global Connected Enterprise or GCE. This is where we brought together one customer experience journey, a supply chain optimization journey, a smart connected products journey, and a data and analytics journey that brought all of these core pillars together into a global connected enterprise.

We coined the project Global Connected Enterprise. This is where we brought together one customer experience journey, a supply chain optimization journey, a smart connected products journey, and a data and analytics journey.

 

Jeff: That seems very ambitious. You’re talking about scaling. You’re talking about breaking down silos. At the Manufacturing Leadership Council, we talk about things in terms of technology change and leadership change and organization or cultural change. I know you’re going to be talking more in depth about these things at Rethink, but can you share a little about how Rheem has been addressing those three important prongs of the digital transformation landscape and journey?

Joe: Yeah, I would tell you as we embarked on the journey, I think the first pillar was executive leadership, executive alignments. How can we go after such an ambitious goal? How do we define the value? How do we get everyone kind of in the boat swimming in the same direction together? That was, you know, a first hurdle. Rheem, up until this point, really hadn’t embarked on something so ambitious. So executive leadership I think was one of the first pillars.

I think the second pillar was how do you build a team? How do you find the right team? How do you find the right skills to go on this journey?

And maybe the third aspect to some of these pillars that would drive a transformation is where does it actually come in? Right? We’ve got executive leadership. We’ve built a skilled, artful team from the business. Then we insert the IT team to really fuse everything together as a single integrated process. And when doing that you are building a culture of teamsmanship. You’re building a culture of trust and that’s what really started to propel us forward.

So, executive leadership, building the right business team with the right skills, and then inserting IT in order to cement that team moving forward.

When doing that you are building a culture of teamsmanship. You’re building a culture of trust and that’s what really started to propel us forward.

 

 

Jeff: Yeah, it seems like you’ve been very successful at building that team and creating those pillars and moving it forward. What advice would you give to manufacturing leaders trying to align strategy with technology?

Joe: I think from a business perspective, it’s easy to bypass process. It’s easy to bypass business process. It’s easy to think that your process is bulletproof. But one of the first things that we learned was, hey, you know what? Reimagining process, value stream mapping the process, finding weaknesses and waste in the process is part of reimagining process. So that was a first pillar, if you will, business process. Reimagining a process is a big deal.

The second part of that journey is data and data governance and data readiness. We talk about it all the time, but it’s probably the single most important aspect to a digital transformation and it’s probably the single most difficult part of that journey to stand up because you have to sell why is data important? Why is governance important? Why is stewardship important? Why is custodianship of data important? And within that realm, understanding the RACI [Responsible, Accountable, Consulted and Informed], understanding who’s responsible and accountable for data within an organization was also something that we had to tackle as well.

Process and data are two foundational elements of the transformation, but then building a platform. Building a platform that moves in your reimagined processes, moves in your new governed data to build this platform that has all of your sources in a reimagined way, in a governed way, that creates the beginning of a new operating system.

Jeff: Was there anything as you were going through this that surprised you, either good or bad, and how did you and your team adjust and adapt?

Joe: I think certain teams had different problems, right? But I would tell you what ran through all of them was data. The data space was really, really difficult and it continues to be difficult today. We spent a lot of time focused on product data. Product data is so foundational to how we talk to our distributors, how we talk to our contractors, and ultimately how we connect with our homeowners.

So, if product data is not governed or is siloed and fractured, it breaks down the customer experience and the trust of the data. What surprised me in that realm is getting our business folks to really lean into investing in people that are accountable and responsible for the management of product data and master data in general. These were things that were handled internally by, I would say “heroes.” And what I mean by that is, typically, what would happen is whomever was most familiar with the process—whoever was the expert in the process—ended up becoming the person who was governing the data, and that is a mistake. That’s something that’s not scalable as the business continues to grow. So breaking down those barriers to create a data governance organization where we had stewards and custodians and that was their job function was something that we had to work on over and over, but ultimately we got there.

We talk about [data] all the time, but it’s probably the single most important aspect to a digital transformation and it’s probably the single most difficult part of that journey to stand up.

 

Jeff: Yeah. I think a lot of organizations struggle with that. The person who’s most involved in it becomes the go-to and then you end up with a firefighter in a situation where they can also become the arsonist and can be a problem.

Joe: Yeah. No listen, 100%, and you know as organizations, you scale and as technology changes and as new technologies come in, like AI, these fundamentals, these foundational aspects of data, really will propel companies to excel in new technologies that require both process and data.

Jeff: So true. Finally, just one last question. What excites you most about digital manufacturing and digital transformation and maybe not just at Rheem but across the entire industry? What has the light bulb going on for you and gets you excited to get up every day?

Joe: Yeah, listen, I think, for our industry, how can you best connect with the customer in the most efficient way. At Rheem, we’re what we call a two-step distribution channel, right? So, we sell to distributors, distributors sell to contractors, contractors sell to homeowners. With the technology and digital transformation that we’ve been seeing at Rheem, we’ve been trying to influence the homeowner even though we’re two steps beyond, right? So, how can we influence the contractor? How can we influence the contractor with new tools, new technologies that can actually influence the sale at the homeowner level?

And those tools and technologies and everything that we think about at Rheem, it’s always about the customer. How can we delight the customer in the best way that we can? And as we think about delighting the customer, obviously, there’s process and data and technology, but it’s our team from top down.

As technology changes and as new technologies come in, like AI, these foundational aspects of data, really will propel companies to excel in new technologies that require both process and data.

 

And it’s not only our team top down that’s affecting customers. We want to go all the way back to supplier. We want to make sure that our supply chain processes are as robust as possible. We want to make sure we have the right components at the right time to manufacture the right products at the right time to ensure that our inventory is serving the right service levels for our customer.

So I would tell you the transformation we’ve been doing at Rheem is 100% customer-led. We take that very, very seriously at Rheem.

Jeff: That’s excellent. And, you know, I can’t wait to learn a little bit more about what you guys are doing at Rethink this June. That case study is going to be wonderful and I appreciate all the things that you’ve shared today and I know that you were probably holding some stuff back as well. That’s sometimes tough when you’re being asked a question and you are like “Oh I want to say something…” But I also appreciate that you’re holding it back because our audience at Rethink will be really excited to hear some new insights and some additional things that add on to what you’ve shared today.

Thank you so much for doing this and I’m looking forward to seeing you in Scottsdale in June.

Joe: Same here, Jeff, thank you for the opportunity. I appreciate it. M

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About the interviewer:

 

Jeff Puma is Content Director for the Manufacturing Leadership Council.